Court Temporarily Blocks Ban on Owner-Operators at L.A. Port

This story appears in the Nov. 1 print edition of Transport Topics.

A federal judge last week temporarily blocked a ban on owner-operators at the Port of Los Angeles, granting an injunction sought by American Trucking Associations.

In her Oct. 25 ruling, U.S. District Judge Christina Snyder essentially blocked implementation of her own earlier decision that rejected ATA’s challenge to the port’s requirement that drayage operators begin hiring only truck drivers who are company employees. ATA has appealed the owner-operator ban and sought the injunction to freeze things until a final ruling is issued.

ATA argued that the injunction was needed because motor carriers require ample notice before making business changes caused by her ruling. Snyder agreed, saying that the interests of the trucking industry outweighed the public interest in the need for the injunction.

She also suggested that ATA had raised some important legal issues in its Oct. 4 appeal of her Sept. 10 ruling that upheld the ban on owner-operators. Snyder stated that because ATA had appealed her decision “and the fact that ATA will be required to undertake preparation for the employee driver provision to take effect, the balance of equities tips in ATA’s favor.”

Snyder noted that motor carriers cannot simply “flip a switch” and be in compliance but rather would need to make substantial operational changes almost immediately to meet an end of 2011 requirement that 20% of gate moves be made by employee-only drivers.

Robert Digges, an ATA vice president and chief counsel, told Transport Topics that the injunction was critical because carriers need time to hire drivers and purchase equipment.

ATA’s appeal centers on Snyder’s ruling that the port had the right to ban independent drayage drivers because the port acted as a business, or “market participant,” and not as a regulator, in adopting its clean trucks plan, which includes the ban. If it were acting as a regulator, the port’s actions would face federal preemption, she said.

Even so, Snyder conceded that “this case presents serious legal questions concerning the market participant doctrine.”

“Although the court does not doubt the correctness of its own findings and legal conclusions, it recognizes that the interpretation and application of the market participant doctrine in this case present substantial and novel legal questions,” Snyder said.

ATA officials have said that the port’s ban on independent operators is a critical issue that could spread to other ports and to the industry in general. ATA and others have said the Teamsters union sees the employee-only model as an opportunity to organize drivers.

“Certainly it’s something that the Teamsters are advocating in ports around the country,” Digges said. “If it’s allowed in a port, it’s going to be allowed anywhere else.”

ATA already has spent more than $2.5 million pursuing the case since 2008, Digges said last month at ATA’s Management Conference & Exhibition in Phoenix.

While ATA has supported the port’s effort to clean its air, it has protested the employee-only business model because, it said, the Federal Aviation Authorization Act of 1994 gives the federal government authority to regulate interstate trucking and does not allow states or local governments to implement regulations that interfere with motor carriers’ “prices, routes or services.”

Snyder’s injunction ruling did not address several other provisions contained in the port’s clean trucks program, including those related to truck maintenance, financial capability and placards.

However, Snyder did rule that the port could move ahead with its off-street parking requirement. She said almost two-thirds of the port’s 980 licensed motor carriers holding port concessions already have submitted parking plans.

“Delays in the enforcement of off-street parking requirements are likely to cause serious safety and traffic congestion problems at the port,” Snyder’s order said. “The port has received and continues to receive telephone calls from neighboring residents complaining about drayage trucks idling and parking on streets, creating safety problems, noise and harmful air pollution from the idling.”

In her order, Snyder encouraged ATA and the port to seek “expedited treatment” from the appeals court in resolving the disputed issues as quickly as possible.

Diggs said ATA does plan to request that the appeals court expedite its handling of the case. But even with “expedited treatment,” a ruling by the circuit court may not come until summer, he said.

Port officials said they were “disappointed” with the employee-only requirement injunction, but said the port would seek an expedited appeals process.

As it now stands, the port will require that 20% of a company’s gate moves be done with em-ployee drivers by Dec. 31, 2011. By the end of 2012, the port would require that percentage to jump to 66%, and to 100% by the end of 2013.

In an Oct. 26 statement, the Coalition for Clean & Safe Ports, a partnership of health, consumer and environmental watchdog groups, called ATA’s appeal and pursuit of an injunction “unconscionable.”